What’s Up With Fuel Surcharges on Award Flights?

When you saw Tim Winship’s expose of American‘s $500 surcharge for an award flight on British Airways, did you wonder whether this was the only instance? A reader did:

“A huge surcharge for a “free” trip on British Airways – is this just an isolated scam or the beginning of another round of frequent flyer devaluations?”

The short answer is, “So far, with U.S. airlines, it’s isolated, but it’s the norm for many other lines.” Apparently, the decision as to whether to impose a fuel surcharge rests with the carrier holding the miles and issuing the award, not necessarily the partner airline that operates the flight. So when I saw the first reports of the AA/BA charge, I started to follow up among other big airlines – foreign and domestic. Here’s what I found, as of mid-February. {{{SmarterBuddy|align=left}}}

The Big U.S. Lines

Three of the largest U.S. lines, each the local cornerstone of its major alliance, say that the AA/BA charge situation is the only surcharge they’re imposing – so far:

• None of the three biggest U.S. lines – American, Delta, and United – imposes a fuel surcharge on its own flights on frequent flyer awards.
• American said the BA surcharge on frequent flyer awards was the only one among its partner lines.
• Delta said that it did not add a fuel surcharge to award trips on any partner-line flights, but it did impose fuel surcharges on award tickets for trips that originate in Europe, to remain “in alignment” with its Air France partner.
• United said it does not surcharge any frequent flyer award travel.

At this point, my take is that these and other U.S. lines will try to avoid adding fuel surcharges on their own and partner-line award trips. But that could change, depending on how contractual details among partner airlines may vary in coming months.

Some Big Foreign Lines

The story is quite different on key foreign lines I’ve contacted so far:

• AirFrance/KLM, British Airways, Japan Airlines, Lufthansa, Singapore, and Virgin Atlantic all impose a fuel surcharge on mileage award travel based on credit in their own programs.
• I have not yet found any important international airline that does not add a surcharge to awards on its own mileage. But I’m still looking.

Figuring out the exact amount of the fuel surcharge can be something of a challenge, because most lines lump it in with some of the other taxes and fees travelers on “free” tickets are required to pay. And, typically, they make it very difficult for you to figure out in advance what the fuel surcharge might be. JAL is the only line I’ve checked so far with an easy disclosure of fuel surcharges: a fuel surcharge link under the “JAL News” heading on its home page.

Even though most lines don’t post such information easily, however, you can usually come close. On Lufthansa, for example, you can start by entering a trip as if you were going to buy a ticket. Once you select your flights, go to the “fare review” page, and click on the question mark box next to the “taxes, fees, and charges” heading. A pop-up menu shows a dozen or two individual line items, one of which is “fuel and security surcharge.” Aha: There it is, – almost. You can’t separate the fuel from the security, but I suspect most of it is fuel.

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And that surcharge is substantial. As an example, for an economy round-trip starting in late February, Los Angeles to Frankfurt, Lufthansa charges $877, total. Of that, says Lufthansa, $324 is base fare and $553 is “taxes, fees, and charges.” On United, which doesn’t add a separate fuel surcharge, the base fare for the same trip is $716 and the “additional taxes and fees” total $146. Presumably, that $146 represents the various mandatory tax, airport, customs, immigration, and similar fees that everybody has to pay. So I figure that the difference between the two additional fee assessments – $407 – is Lufthansa’s fuel surcharge.

This little exercise illustrates what a scam a “fuel surcharge” really is. Do you really believe that, if fuel costs went down, Lufthansa would actually fly you from Los Angeles to Frankfurt round-trip for just $324? If you do, I have a nice bridge on either coast I’d like to sell you. I’ve often wondered why so many airlines artificially split the true fare into a phony base fare and an equally phony fuel surcharge, and this exercise might suggest some reasons: So they can hit people on supposedly “free” tickets with what is really a fare supplement? So they can avoid taxes on the part of the true fare they allocate to a fuel surcharge? So they can keep travel agency payments down by excluding fuel surcharges from commissionable fare totals? So they can ding contract-fare customers by what amounts to a retroactive increase in a fixed fare? Take your pick.

This is not to say that all huge surcharges are airline scams. In Tim Winship’s horrible AA/BA example, the surcharge hit also includes the deplorable British “air passenger duty” that everyone must pay on all airline departures – paid or frequent flyer – from the U.K. For flights to the U.S. or Canada, that fee currently amounts to £60 (about $96) in economy class and £120 in all other classes, including premium economy.

Dealing With the Surcharge

If all of your frequent flyer credit is with airlines based in the U.S., your only current worry will be to avoid using American miles to fly on British Airways. You can only keep hoping that no big U.S. line will start to surcharge any other partner-line awards. On the other hand, if all your credit is tied up with foreign lines, you’ll have a tough time avoiding the surcharge.

But if you have miles in both U.S. and foreign lines, or credit card miles you can convert to miles in different lines’ programs, you have to do some searching. Say, for example, you want to fly from Chicago to Paris in April on a frequent flyer award (I found low-level award seats available on three lines):

• On United, you would pay only 55,000 miles plus $90 fees and taxes, but on only a very few days. On most days you’d need 82,500 miles plus $90.
• On Delta, you would pay 75,000 Delta miles plus $93 fees and taxes.
• On Air France, you would pay 50,000 Air France miles plus $441 fees, taxes, and fuel surcharge.

For any given trip, the numbers will vary by route, airline pair, and class of service. Just be careful to check out all the options before you commit. And keep your eyes out for more surcharges: Never underestimate the power of a bad idea in the airline business.

Your Turn

Have you encountered an unexpected fuel charge on an award flight? Tell us about it by adding a comment below.